The brokerage firm effect in herding: evidence from Indonesia

The brokerage firm effect in herding: evidence from Indonesia

0.00 Avg rating0 Votes
Article ID: iaor201112344
Volume: 34
Issue: 3
Start Page Number: 461
End Page Number: 479
Publication Date: Sep 2011
Journal: Journal of Financial Research
Authors: , , ,
Keywords: Indonesia, stock market
Abstract:

We examine herding behavior of domestic and foreign investors in the Indonesian stock market. We document that both domestic and foreign investors from a particular brokerage firm tend to herd. The foreign investors exhibit a greater propensity to herd than domestic investors. However, when examining investor trading across brokerage firms, we find only weak evidence of herding by domestic investors and no herding by foreign investors. Our overall findings suggest a strong brokerage firm effect on herding but a weak marketwide effect. Moreover, we find evidence that the strong brokerage effect on herding is likely driven by acting on common information.

Reviews

Required fields are marked *. Your email address will not be published.